Settlement - Financial definition
Concise definition of the term settlement
The term settlement describes the process of carrying out the delivery of a security and the transfer of the corresponding cash payment between two counterparties to a security transaction according to the terms which have been agreed.
Comprehensive definition of the term settlement
A transaction is said to be «settled» once the securities account of the buyer has been credited with the purchased securities (and debited the corresponding cash amount), while debiting the securities account of the seller with the securities (and crediting its account with the corresponding cash amount).
Such credit and debit movements typically take place simultaneously, in a process called delivery versus payment or DvP.